Peng Li has been the CEO of FY Financial (Shenzhen) Co., Ltd. (HKG:8452) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for FY Financial (Shenzhen).
Comparing FY Financial (Shenzhen) Co., Ltd.'s CEO Compensation With the industry
According to our data, FY Financial (Shenzhen) Co., Ltd. has a market capitalization of HK$252m, and paid its CEO total annual compensation worth CN¥668k over the year to December 2019. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at CN¥432.1k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥1.7m. This suggests that Peng Li is paid below the industry median.
Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. There isn't a significant difference between FY Financial (Shenzhen) and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at FY Financial (Shenzhen) Co., Ltd.'s Growth Numbers
FY Financial (Shenzhen) Co., Ltd. has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is down 24% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has FY Financial (Shenzhen) Co., Ltd. Been A Good Investment?
Since shareholders would have lost about 27% over three years, some FY Financial (Shenzhen) Co., Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Peng is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Peng until investor returns are positive.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for FY Financial (Shenzhen) that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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